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Curaleaf to expand cannabis operations in Maryland with $30M financing

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Curaleaf to expand cannabis operations in Maryland with $30M financing

Curaleaf Holdings Inc. is planning a series of financial agreements to expand its operations and increase patient access to medical cannabis in Maryland.

The plan includes completion of a $30 million convertible financing with the owners of HMS Health LLC, HMS Processing LLC, HMS Sales LLC and MI Health LLC.

Under the terms of the agreement, businesses of HMS Health, HMS Processing, HMS Sales and MI Health will rebrand under the Curaleaf name and receive products, services and other support from the cannabis company.

The rebranded businesses hold a 21,000 square-foot cultivation facility and 1,000 square-foot processing facility in Frederick, Md., and two separate 1,000 square-foot dispensaries, each in Gaithersburg, Md.

The $30 million in loans from Curaleaf, together with accrued interest, will be convertible into equity of each of the rebranded businesses. Moreover, the owners of the rebranded businesses will receive $2 million in Curaleaf shares upon completed conversion of the loans.

In addition, the financial agreements include a $2 million acquisition option for Town Center Wellness LLC, which is operating as Elevate Takoma and owns a 1,500 square-foot dispensary in Takoma, Md.

The rebranding for all of the acquired businesses is expected to occur in the second quarter of 2019.